Undesirable Variance Of Material Cost In Hong Kong Construction Essay

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Construction projects are complex working condition. It is because they involve many human and non-human factors and variables. They usually have duration long time period, the uncertainties and complex relationship between participants. Much Things need to change the actual situation of construction projects. Even the most thoughtful projects may require change due to various factors. In Hong Kong causes of an undesirable variance of material cost of a construction project are based two factors. It divided to price variance and quantity variance. It sub-divided have three basic essential elements. It includes how many supply and demand sources with between supplier and buyer, production supply velocity with total amount of material resource in the world. It will direct or indirect to change the variance of material cost of a construction project in Hong Kong.

1.1 Supply and demand requirement condition

In Hong Kong many construction material is come from other countries such as Thailand, China, Japan, and Italy etc., It cause the material cost would be easy adjust by the supplier control. When have many buyers to procure their material at the same time. The suppliers will adjust a higher cost to sell for buyers (refer. fig 1). At this situation, the construction cost will also increase for the project. Therefore, project management teams must have the ability to respond to variations effectively in order to minimize their adverse impact to the project. They need prevent over budget into the project.

However, most developers will still continue to transfer additional costs to end-users relate to purchase price up material costs. In conversely, If developer or contractor to reduce purchase those building materials then supplier will also decrease the material cost price to buyer. But the adjust cost price is very slight. As a result, it causes unbalance social phenomenon due to between developer and supplier control the material price and building property market price.

On the other hand, the material cost variance is come from different countries the different economic and marketing factors. It includes have inflation, increase in interest, change in exchange rate, market recession, strong competition from rivals etc., It will change the material cost variance rise or drop for the project.

1.2 Amount of material resource

Many material cost is depending on the world amount of resource such as copper, steel, aluminum etc., Material price fluctuations are affected by the amount of resources in the world. This means that a small amount of materials in earth will be higher sell price. When the number of production or raw materials is less than the output then the prices will increase in the market for sale. This common logic cannot be changed it.

The developers only before the construction stage changes the original of expensive materials replace other types of cheap materials for used. In this way, project teams can be maintain the construction cost to continue construction of the building under budget account. Otherwise, the result of the contractor will defer the completed time and decrease the quality standard and over budget for the project.

1.3 Conclusion

Undesirable variance of material cost may cause significant adjustments to the project time, cost and quality. However, the project team can administer a good mechanism to deal with the variance of material cost and based on past projects review and reference to solve this problem. For an example the contractor/ developer can make a contract agreement regarding the material cost and quantity cannot be changed with suppliers. This method can solve the material cost fluctuate affect to the total construction cost. In these criteria, the contractor can achieve the client requirement for the whole project.

1.4 Reference figure

Highest point of cost of material

(Source from: RLB-QuarterlyHongKongConstructionCostReport-March2010)(Fig 1)

Maximum price: This is because many projects in the same period use this material. It caused the prices of materials continue to rise.

2.0 Introduction

Hong Kong's construction industry has a very poor safety track record as compare with other countries such as Japan, Singapore and England (refer fig 2-4). The mainly cause arise from different aspect. It includes negligence of construction workers, multi-layer of sub-contracting system, tight working condition, insufficient guidance and supervision by supervisory staff, inadequate financial, technical and moral support from senior management, untidiness on site, poor coordination between sub-contractors, and design fault.

2.1 The main safety issues includes have:

2.11 Multi-layer of sub-contracting system

The nature of Hong Kong construction industry is its subcontracting system. Main contractor involve employ to have many trades sub-contractor together for development of building. For example: Laying and curing of concrete, bending and fixing of steel reinforcement bar, erection of timber formwork, and plastering work, etc., The reason is that the main contractor cannot undertake different types of technical work and much cash flow at the same time. However when use of many trades of sub-contractor for construction of work. This is not conducive to communication and safety related information and coordination of site activities. It is because when an accident or improper working appearance, the main contractor has is indirect or difficulty to inform that relates sub-contractor's workers. It lead to main contractor cannot repress or decrease the accident occurs.

2.12 Tight working conditions

In Hong Kong, the construction period is quite short of the construction projects. A typical 40 stories high-rise building project is require the construction period about two years. The concrete casting cycle of structural floors would be 4 to 5 days. It is compare with other countries is very tight. Moreover workers in Hong Kong the working time are average of 48 hours per week. The other countries the working time are average 40 hours per week. Those results will affect the workers very tired and high pressure in the work. It cause an accident easy occur. It is because a tight working condition often induces lack of safety precaution. A typical example is worker as soon as possible doing his works without wear safety belt to execute their working at height (refer fig 5). As a result the worker to be death from not careful falling down.

2.13 Poor management and lack of resource

All access or passageway should be properly maintained and clear of obstruction. However in Hong Kong's construction industry the main contractor cannot achieve clear of obstruction at every place. They can concentrate the busy with common use the access road only. The reason is main contractor are lack of manpower resource to execute maintain cleaning. Many trades of sub-contractor are producing construction waste and general rubbish in the construction site. But the construction waste and rubbish produce are faster than main contractor's workers cleaning. Therefore, concealed or not commonly used access road often will be dangerous or accident when anyone through this pathway.

.2.2 Conclusions

Hong Kong to improve the poor safety records how to deal with this problem. It should from several aspects process. Is come from Government, Employer and Employee are mutual liability. Government such as Labour department has less safety promotion to public know the construction safety importance. Few of his safety personnel to the site inspections and the inspection time is very short on the construction sites. These are the indirect cause of the accidents in Hong Kong. Employers and employees should be complying with safety legislation to carry out the task in the construction site. Employers should provide adequate safety environment condition, safety training to employees for construction.

But employers often said the progress is very tight of construction. It causes often neglect the importance of security, leading many workers to accidents. Employees when dangerous environments appear, they should immediately stop all the work and notify the employer to improve the dangerous environment. If the employer failed to improve the dangerous work then employees should be immediately inform relevant government departments to deal with this problem.

In fact, all relate people are compliance with all safety legislation and keep proper reporting mechanism. The result of Hong Kong construction industry accidents will be reduced and may be lower than other countries.

2.3 Reference figure



Number of accident and fatality rate per 1000 workers in construction industry 1999 to 2008

(Source from: occupational safety and health statistics) (Labour department)

(Source from: Poon et al, 2008) Hong Kong's accident and death rate compare with other countries.) (Fig.4)

The working platforms not meet the requirements of the regulations (Fig.5). It is a common appear in Hong Kong. (Source from: Hong Kong construction -Safety and management & law 2nd edition)